Encouraged by renewed peace talks between Israel and the Palestinians, Christian pilgrims from around the world converged on Jesus's traditional birthplace Monday to celebrate Christmas -- a palpable contrast to the sparse crowds of recent years.

The diverse crowd included festive American tourists, clergymen in brown flowing robes and Palestinian scouts wearing kilts and playing bagpipes.

"I'm Catholic. I always wanted to see the beginning of Christianity, the whole history. It's something you grow up with," said Kristin Obeck, 37 and a schoolteacher from Richmond, Va.

The atmosphere was festive, but a heavy police deployment, the presence of Israel's massive separation barrier and unease among Bethlehem's shrinking Christian population served as reminders of the lingering tensions in the region.

Israeli tourism officials said they expected about 20,000 visitors to cross from Jerusalem into neighboring Bethlehem, an increase of about 50 percent over last year. Tourism workers handed out sweets and flowers to pilgrims, and smiling Israeli soldiers posed for pictures with travelers. Bethlehem's governor, Saleh Tamari, said all of the town's 5,000 hotel rooms were booked.

"If you can't be with family, it's good to be here where it all went down," said 23-year-old David Collen of Hickman, Neb., who is studying the Middle East at Tel Aviv University in Israel.

Tourism got a boost from the renewal of peace talks last month at a summit in Annapolis, Md. Tiago Martins, 28, from Curitiba, Brazil, said the talks prompted his first visit to Bethlehem.

"The idea that it's a Christian city makes me more calm," Martins said. "And I think going to the West Bank is more comfortable since Annapolis."

Priests and monks, tourists, Palestinian families and police mingled in Manger Square outside the Church of the Nativity, the site where tradition holds that Jesus was born.

Vendors hawked beads, inflatable Santas, roasted peanuts, cotton candy, steamed corn and Turkish coffee while city residents watched the festivities from balconies and rooftops.

"This year is much better than the last seven years for tourism," said shopkeeper Jacques Aman, whose wooden handicrafts shop offered crosses, rosaries and Nativity scenes. "The atmosphere is better in general. There is relative calm, from the security standpoint."